Sam Walton
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Founders · #434 Sam Walton
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How Did Walmart Get Ahead of Kmart?
David Senra, reading from Vance Trimble's biography of Sam Walton, says Walmart got ahead of Kmart because Kmart ignored Walton's small-town stores and gave him a 10-year period to learn the discount business.
Sam Walton copied what he found in other stores. He studied Harry Cunningham, who came up with the Kmart concept, and said he took pieces of it and made Walmart as much like Kmart as he could. At the start Walmart was amateurish and far behind. Kmart let those stores stay out in little towns while Walton developed and learned. Walton said a competing store in a small town would have been unthinkable, and the small-town market protected him.
Kmart focused on major cities. Walton kept
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How Much Were the Walton Children's Shares Worth?
David Senra says each of Sam Walton's four children has owned one-fifth of their parents' stock and property since 1954, and at the time of the recording the shares were worth $130 billion, $127 billion, or $117 billion depending on the child. Senra is not sure he remembers that opening figure and puts it at something like $5,000. One son later put the shares at no more than $5,000 each, because the parents had only a variety store or two.
Sam Walton and his wife created the trust when one son was 10 and a daughter was only 5. Father-in-law L.S. Robson, a banker and a lawyer, urged the early estate planning after he had already given Sam Walton's wife and her siblings equal shares in a vast
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How Did Sam Walton Start Sam's Wholesale Clubs?
David Senra says Sam Walton started Sam's Wholesale Clubs by copying a membership wholesale club that Sol Price had already made successful.
On a sunny January morning in 1983, Sam Walton flew into San Diego to investigate a membership wholesale club. Sol Price, a California entrepreneur, had originated the idea five years earlier and was getting rich by selling merchandise at only 10% above manufacturing prices. Sam Walton figured he could do the same. He intended to borrow from Sol Price the way he had copied schemes from JCPenney, Herb Gibson, and other merchants. He returned to Bentonville, called his top strategists, and began a division of Sam's Wholesale Clubs.
Walton had spent year
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How Did Sam Walton Manage Walmart?
David Senra says Sam Walton managed Walmart by walking stores, warehouses, and truck cabs, and some staffers called him that old slave driver, the boss people resigned or got fired under because the work was a pressure cooker. The public picture of a good old country boy in a soft velvet glove missed the iron fist inside. He can get a little tough if he sees things he does not like. He knew the business from top to bottom because he used to sweep the floor, keep the books, and buy the merchandise. A core asset was his willingness to try something new, and he repeated a low resistance to change, the RC factor, throughout the entire company.
On the road he flagged down one of his semi trucks,
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How Did Sam Walton Beat Bigger Retailers?
David Senra, reading Charlie Munger's account, says Sam Walton beat bigger retailers by first knocking out small-town merchants with a more efficient system, and only then taking on the big chains.
Munger compared him to a prizefighter who wanted a record good enough for the finals, so he went out and fought 42 palookas. The result was knockout after knockout, 42 times. Walton might not have been able to tackle some titans head on at the time. With the better system he broke other small-town merchants, time after time. Then, as he got bigger, he started destroying the big boys.
The strategy was very shrewd. Scale and fanaticism combined to be very powerful.
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What Was Sam Walton's Golden Rule at Walmart?
David Senra, reading from Vance Trimble's biography of Sam Walton, says Sam Walton's golden rule at Walmart was that the customer is always right, and if the customer is not right, refer to rule number one.
Hardly a day passed without Sam Walton reminding an employee of that rule. Customer satisfaction was the first essential ingredient, and the rest of the approach was a combination of parts, basic and few. The standard was to go above and beyond when something came back.
A customer who bought a pair of shoes at Walmart and brought them back, for whatever reason, was to have the shoes cheerfully replaced. The sales clerk was also to throw in a pair of socks or stockings for the hassle of
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Why Did David Glass Write Off the Second Walmart?
David Senra says the second Walmart was such a mess that David Glass wrote Sam Walton off, even though Glass later became the CEO of Walmart 20 years on.
Sam Walton tried to recruit David Glass by taking him to the second Walmart ever opened. Glass thought Walton might have lost his marbles with discount-store foolishness and doubted the format had any future. Glass called it the worst retail store he had ever seen. Walton had bought a couple of trucks of watermelons, stacked them on the sidewalk, and put a donkey ride in the parking lot. It was 115 degrees. The watermelons began to pop, the donkeys began to do what donkeys do, and the mix ran all over the parking lot. Inside, the same mess
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What Was Sam Walton's Simple Idea Behind Walmart?
David Senra says Sam Walton's idea behind Walmart was absurdly simple: buy cheap, sell low every day, and do it with a smile. Making money was only a game, a test of his imagination and expertise to see how far he could drive a business concept. Wall Street had a hard time getting the drift of that.
The passage illustrates Charlie Munger's idea that you should find a simple idea and take it very seriously. Walton wanted to wake up every day, work on Walmart, and change his mind when new information arrived, turning from going left to going right. He was a genius in business with an iron mind, unwilling to compromise carefully thought out principles, and still flexible. If a course did not w